Titan's Dividend.

Just saw this news clip posted on Business Times:

• Payout cheer for Titan investors
  Pending shareholders approval in May, Titan Chemicals is proposing a full-year dividend payout ratio of 7.5 sen per share


• Payout cheer for Titan investors
  By Ooi Tee Ching
  bt@nstp.com.my
  
  February 27 2007
  
  TITAN Chemicals Corp Bhd, South-East Asia's largest polyolefins producer, expects to give higher dividends to shareholders this year, its chief said.
  
  The company, whose products are used to make plastic products, wants to increase its payout to shareholders on higher profits.
  
  In 2006, Titan's net profit more than doubled to RM773.2 million, thanks to contribution from Chemical Brothers Ltd, a newly acquired unit. Revenue went up by 21 per cent to RM5.45 billion from RM4.50 billion.
  
  Managing director Thomas Patrick Grehl said, pending shareholders approval in May, Titan is proposing a full-year dividend payout ratio of 7.5 sen per share.
  
  In 2005, Titan paid out 20 per cent of its net profits as dividends and that worked out to be 6 sen per share.
  
  "We had a good year in 2006. We plan to give back 30 per cent of net profit, or 7.5 sen per share, to investors," he told a media briefing held in Kuala Lumpur yesterday.
  
  Titan plans to de-bottleneck its crackers to produce more olefins.
  
  "We are goint to de-bottleneck the polypropolene plant so that it can churn out to 480,000 tonnes per year from the current capacity of 380,000 tonnes," Grehl said.
  
  In the last six months, the trading gap between the price of raw material naphtha and end-product polyolefins had resulted in healthy profit margins for Titan.
  
  Grehl is optimistic of Titan's outlook as forward orders of polyolefins are exceeding regional supply.
  
  "The stable regional outlook for polyolefins, amid a slower supply growth and steady demand, will continue to boost Titan's revenue growth," he added.
  
  In meeting robust polyethlene demand in Indonesia, PT Titan, formerly known as PT Petrokimia Nusantara Interindo (PT PENI), is increasing output.
  
  Last year, Titan's Indonesia operation churned out 100,000 tonnes of polyethlene and sold them at between US$1,300 (RM4,550) and US$1,400 (RM4,900) per tonne.
  
  Despite such high prices, it captured 22 per cent of the Indonesian polyethlene market.
  
  "Basically, whatever we produce in Indonesia, we can sell. To meet growing demand, we're ramping up production to 300,000 tonnes," Grehl said.

I find it great to read such stuff where the listed companies reward their shareholders.

However, in Titan case, I am left wondering because as it is, the cash balance sheet is not looking that great to support the size of a 7.5 sen cash dividend.

Have a look at the pdf file link attached in Titan's earnings.

http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/ba387758ae37412b482568a300466fb6/48256e5d00102df3482572810031f62d/$FILE/Qtr%204Announcement1206.pdf

The following is the snapshot of their cash balance sheet.



Cash balances of some 25.748 million.

Consider this... Titan has some 1,752,700,000 shares. A dividend of 7.5 sen will work to..... ?